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Morgan Stanley’s cut brings Inmarsat down to earth

Miles Costello

The market doesn’t take dividend cuts well, even if they are about investing in future growth. And so it was with Inmarsat, the satellite operator, whose shares fell towards earth after analysts at Morgan Stanley became the latest to cut their price target.

Inmarsat slashed its dividend by nearly two thirds last week, arguing that it would use the saved capital to invest in providing in-flight wifi for commercial flights.

As it cut its price target for Inmarsat shares from 550p to 500p, Morgan Stanley said that the cut was far deeper than it had expected and complained that the company’s leverage levels were still rising.

In a grim outlook for payouts in the future, Morgan Stanley also said that it thought that Inmarsat would…